What is an ETF?

InvestingWarren TeamPublished April 25, 2026

Quick answer

An ETF is a basket of investments (stocks, bonds, or commodities) that trades on an exchange like a stock. They offer instant diversification, very low fees, and tax efficiency, with most popular ETFs charging under 0.10% annually.

ETF structure: thousands of underlying stocks bundled into one tradable share.

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